Registrars’ objectives
The legislative changes are underpinned by a new set of objectives for the registrars. They provide a framework for how to operate as an organisation, from guiding decision making to exercising the new powers.
Objective 1
To ensure that any person who is required to deliver a document to the registrar does so (and that the requirements for proper delivery are complied with).
Objective 2
To ensure that information contained in the register is accurate and that the register contains everything it ought to contain. This reference to ‘the register’ includes any records kept by the registrar under any enactment.
Objective 3
To ensure that records kept by the registrar do not create a false or misleading impression to members of the public.
Objective 4
To prevent companies and others from:
· carrying out unlawful activities, or
· facilitating the carrying out by others of unlawful activities
Overview
The Act gives Companies House the power to play a more significant role in disrupting economic crime and supporting economic growth. Over time, the measures will lead to improved transparency and more accurate and trusted information on the registers.
There’ll be new responsibilities for:
· all new and existing company directors
· people with significant control of a company (PSCs)
· anyone who files information on behalf of a company
This is a large and complex set of changes which will be introduced in phases over the coming years. The ongoing operation of the changes will be paid for by an increase in Companies House fees, on a cost recovery basis. The fees are reviewed every year to make sure they’re set at the right level. Some fees were increased on 1 May 2024.
This programme of change has several distinct strands, starting with increased powers which will begin the process of cleaning information on the existing registers and querying new information as it is submitted. This started on 4 March 2024, with work ongoing over several years to remove incorrect or fraudulent information from the register in priority order. An iterative approach will be taken and there will be testing, monitoring and recalibrating new processes.
From 4 March there were increased powers to analyse and share data with law enforcement agencies and other government departments. By the latter part of 2024, Companies House will have implemented the power to sanction new offences.
Identity verification is a major component of the reforms and involves significant system development for the more than 7 million individuals who will go through these checks. By spring 2025, there will be introduced the first step by allowing Trust and Company Service Providers (TCSPs) and other professional service providers (such as accountants and solicitors), who are registered for Anti Money Laundering with a supervisor in the UK, to register to become Authorised Corporate Service Providers (ACSPs). This will allow them to carry out verification services for their clients and provide these details to the registrars.
By autumn 2025 there will commence the new identity verification requirements where all directors and PSCs for new incorporations will be required to verify their identity at the point of incorporation. There will be a transition period of 12 months for existing companies who will be required to provide identity verification credentials for their directors and PSCs when their confirmation statement is due.
Reforms to limited partnerships (LPs) will take place no sooner than spring 2026 meaning their information will be more accessible and transparent. Further transparency of company ownership will be improved by the publication of more information on shareholders. We know this will be a significant undertaking for some companies and we are currently working through the implementation options.
Lastly, following an extensive formal notice period, all accounts will be required to be delivered via software. No commencement date for commencement will be announced until the complex changes have been fully discussed and agreed.
Implementation
While the scale and scope of these changes should not be underestimated, the work already done through the wide-ranging and ongoing transformation programme puts Companies House in a strong position to implement them as quickly and efficiently as possible. However, the changes are technically and operationally complex and many require the ongoing collaboration from expert stakeholders.
It is not currently possible to set a firm timetable for implementation of all measures as some require secondary legislation. Around 50 statutory instruments will be commenced over 18 months with implementation activity and transitional periods continuing until completion in 2027. Timelines are dependent on suitable Parliamentary time in both houses and will be kept under review.
Whilst the need for swift action is understood, unforeseen challenges may extend the timelines. There is commitment to upholding the integrity and effectiveness of the legislation. On occasion, developing complex services and systems to support this may require an adjustment to planning and delivery timelines.
This document will be updated to reflect current planning assumptions.
Communicating the changes
A comprehensive communications exercise is taking place to inform customers and their agents of the new requirements with plenty of notice. It’s important that companies make sure their registered email address is correct and that emails are monitored.
The Companies House Changes to UK company law website details the changes and what customers and/or their agents need to do and by when.
Summary of changes
This is the current intended timetable. Timelines are dependent on suitable Parliamentary time in both houses and will be kept under review.
From 4 March 2024
Companies House has been able to improve the quality of information on the register by:
· querying and rejecting new information received in customer filings which is suspected to be wrong or fraudulent
· removing more inaccurate information from the register, including removing names and addresses of citizens which have been used without consent – the processes for removing information are being streamlined and more information can be removed administratively, without people needing a court order
· querying and rejecting company names which have been chosen to mislead customers, facilitate fraud, or give the false impression that the company is connected to a foreign government
· improving the accuracy and reliability of registered office addresses by introducing a new definition for an appropriate address (companies are not able to use a Royal Mail PO Box and equivalent services offered by other parties) – Companies House will be able to commence strike off measures against companies if they do not provide an appropriate address within a specified period
Companies House has been able to improve investigation, enforcement and data sharing by:
· sharing more information with law enforcement agencies and regulatory bodies to help tackle money laundering, fraud and other criminality
· undertaking greater analysis of information held, including comparison against other data sets obtained externally
Companies House has been able to better prevent disqualified directors from acting by:
· rejecting documents notifying appointment of a new director to an existing company where the individual is a disqualified director
Companies House has also been able to require companies to:
· provide a registered email address to allow Companies House to contact companies about matters relating to their filing quickly and efficiently (this email address will not be shared on the public register)
· confirm that the future activities of the company are lawful at the point of incorporation, and to confirm this every year on the confirmation statement
From 1 May 2024
Companies House has been able to:
· charge higher incorporation and annual fees to fund investigation and enforcement activities against those misusing the register
By autumn 2024
Companies House should be able to:
· issue financial penalties for any relevant offences under the new Act and the Companies Act
By winter 2024 into 2025
Companies House should be able to:
· expedite the striking off companies where the registrar has concluded the company has been formed for a false basis
· annotate the register in a wider range of circumstances, such as when a company has a director who has been disqualified but has yet to terminate their appointment on the register, or where Companies House has issued a statutory notice to require more information from a person, but the matter remains unresolved
By spring 2025
Companies House should be able to:
· carry out checks on Authorised Corporate Service Providers (ACSPs) to authorise them to carry out verification services – ACSPs will be required to be registered in the UK and be subject to the UK’s anti-money laundering regime
· allow individuals to voluntarily verify their identity
· receive and assess applications from individuals seeking to have residential addresses suppressed from public disclosure in certain circumstances
By summer 2025
Companies House should be able to:
· allow access on request to certain trust information on the Register of Overseas Entities
By autumn 2025
Companies House should be able to:
· make identity verification a compulsory part of incorporation and new appointments for new directors and PSCs
· begin the 12-month transition phase to require more than 7 million existing directors and PSCs to verify their identity – the identity verification will happen as part of the annual confirmation statement filing
By spring 2026
Companies House should be able to:
· make identity verification of the presenters a compulsory part of filing any document
· require third party agents filing on behalf of companies to be registered as an ACSP
· reject documents delivered by disqualified directors as they will be prohibited from doing so, unless they are delivered by an ACSP for specified filings permitted by law
By the end of 2026
Companies House should be able to:
· require all limited partnerships to submit more information, providing greater transparency for users of the register
· complete the transition period for all individuals on the register requiring identity verification, and start compliance activity against those who have failed to verify their identity
· facilitate greater cross-checking of information and data between Companies House and other public and private sector bodies
Following accounts reform
Companies House should be able to:
· mandate software-only filing for all accounts – package accounts will be able to use the new zip package functionality
· remove the option for small companies and micro-businesses to file abridged accounts
· require all companies to file profit and loss accounts, helping to improve the financial information on the register – and require small companies to also file their directors’ report
· require a company claiming an audit exemption to provide an enhanced statement from their directors on the balance sheet, specifying the exemption being claimed and confirming the company is eligible for it
· limit the number of times that a company can shorten its accounting reference period
Following the implementation of restrictions on corporate directors
Any corporate directors of companies will be restricted so that any corporate director of a company must have an all-natural person board.
All the directors of the corporate director will be required to verify their identity for the corporate director to be registered.
Only UK corporate entities with legal personality will be capable of acting as a corporate director. We will prohibit the use of overseas companies from acting as corporate directors in the UK.
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